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Negotiate Your Financial Aid

Don't assume your aid package is the final offer.

If you or someone you brought into the world will be going to college next year, you're probably awaiting that bulging envelope from the future alma mater. The package will include, primarily, the acceptance letter, enrollment information, and perhaps contact information for Meat, your future dorm-mate. Oh, and it'll also include your financial aid package if you applied.

Based on information you provided, the school will try to bridge the difference between the cost of attendance and your "expected family contribution" (EFC), which is how much you can be reasonably expected to fork over. The packet may include some grants and scholarships, but most aid comes in the form of student loans.

You may not be stuck with the first aid package you're offered. It's not unreasonable to ask the folks in the financial aid office to take another look, but be very clear why you think they should reconsider. Here are some possible reasons:

You want to make sure they are aware of extraordinary financial circumstances, such as having to care for elderly parents, outrageous medical bills, or a recent loss of income.

You have received a much more generous offer from another school, and you'd like to give the school a chance to match it. Some financial aid officers are more receptive to this tactic than others, but it won't hurt to try. You'll have more luck if the student is academically in the top 25% of the applicant pool.

The forms you submitted weren't processed accurately, and you'd like to have your EFC recalculated. It's always possible that an aid processor made a mistake, or your handwritten "$40,000" looks a lot like "$90,000." Make sure to review all paperwork for accuracy and clarity.

You received a onetime windfall (such as an inheritance) that skewed your results.

You are footing the bills that allow your other children to attend a private elementary or secondary school, or even grad school. Some schools (generally private schools) will consider taking the other tuition bills into account.

The student has been receiving Social Security benefits, which may have been included in the aid calculation. However, benefits end at age 18, so the student won't have that resource during the college years.

You're just curious about how your EFC was calculated. Financial aid officers have a lot of leeway in how they distribute the institutional (i.e., not federal) money. They often make judgments about an applicant's finances based on their experience and expertise. For example, there is more than one way to calculate a home's equity, and tax deductions might be added back to income. Ask for an explanation of how your aid was determined if you suspect a discrepancy.

Author

As a former financial advisor and English teacher, it was inevitable that Robert Brokamp would one day write about the management of money. His musings on retirement, investments, budgeting, and whoopee cushions can be found on Fool.com and in various other publications, including Better Investing and Newsweek. He was a contributor to The Motley Fool's Money After 40, the co-author of The Motley Fool Personal Finance Workbook, the author of The Motley Fool's Guide to Paying for School, and is the editor of the Motley Fool Rule Your Retirement newsletter service. Robert wishes to one day definitively answer the question, "Why do we make bad decisions with our money when we know better?"
Robert lives peripatetically in Alexandria, Va., with his wife and four children -- but on autumn Sundays he wishes he were in Raymond James Stadium or wherever the Tampa Bay Bucs are battling.